* The management report of Merck KGaA, Darmstadt, Germany, has been combined with the Group management report and published in both our 2015 Annual Report and our Annual Financial Statements. The authoritative German versions of the annual financial statements and the combined management report of the Group and Merck KGaA, Darmstadt, Germany, for 2015 have been led with the electronic German Federal Gazette and are available on the website of the German company register.

GROWTH

One plus one equals three – that‘s the objective when two major players within an industry join forces. Having completed the acquisition of the laboratory supply company Sigma-Aldrich, we are now one of the leaders in the global life science industry. Customers will benefit from a superb e-commerce platform, among other things.

US$ 17,000,000,000: An impressive sum that we paid for the U.S. life science company Sigma-Aldrich. It was a mega deal that attracted attention beyond the industry. Our managers are firmly convinced that it was worth every cent. They see this as a significant milestone in a long-term strategy to invest in life science. The first major step was the acquisition of Millipore in 2010. The U.S. company was combined with our existing laboratory business, which was too small to command a leading position in the sector on its own. And with Sigma-Aldrich, the next step, which was actually a leap, followed. That’s because as a result of the combination, we are now playing in the top league of the gigantic life science market worth more than € 100 billion.

More than 300,000 innovative products

With the integration having started, our Life Science business sector will operate worldwide under our corporate brand - execpt for the United States and Canada where for legal reasons it will operate as MilliporeSigma. Around the globe, the science and technology company Merck KGaA, Darmstadt, Germany, now has around 50,000 employees working at 72 production locations in 66 countries. Around 9,000 of them joined from Sigma-Aldrich. The U.S. company manufactures and distributes chemicals, biochemicals and other products for research and applied labs. We now have an enormous product range of more than 300,000 life science products sold under established brands, for instance SAFC and BioReliance as well as Millipore and Milli-Q. Globally, there’s probably hardly any drugs that do not come into contact with our substances or products in the course of their discovery, development or production. The company offers a comprehensive portfolio along with global reach and extraordinary delivery capabilities. ‟Our leading e-commerce and technology platforms assist our customers in finding the right products to conduct their science experiments through a simple search, and then buying them easily and reliably. This capability allows us to be a part of every future transformational innovation in the life science market,″ says Silji Abraham, Chief Information Officer for Life Science. ‟And I can easily imagine a future where our products and services are found in every lab around the world.″

Life Science at Merck KGaA, Darmstadt, Germany

SALES BREAKDOWNBY BUSINESS SECTOR

* This sales breakdown would have resulted had the first-time consolidation of Sigma-Aldrich already taken place on January 1, 2015. Therefore, they are not identical to the sales percentages actually reported for 2015.

over1 million

Life Science customers worldwide

more than300,000

Life Science products

19,000

Life Science employees around the world

Close to customers

In order to solve the toughest problems in the industry, the new team is intensifying its collaboration with the global scientific community, in other words customers. In the dynamically growing international life science market, it’s clear that customer needs are growing. They want top quality, global solutions, a broad range of possibilities and firstrate services. So the aim is to perfectly fulfill these needs in order to further raise competitiveness. After all, what’s good for customers is also good for business and employees. In research, development and along the entire biotech production chain, our company wants to offer scientists the best possible support – through professional competence in applications technology and process planning. In order to be close to customers, independent commercial areas are organized into regions. The chief aims are to further and launch innovations that are aligned with industry needs.

Efficient e-commerce platform

When it comes to winning over customers from the scientific community, an efficient e-commerce platform is another important factor. And that's where we are well ahead of the game. By acquiring Sigma-Aldrich, the company has the leading e-commerce platform in the life science industry, which was also one of the key drivers of the acquisition. Of course we will utilize the platform in order to market not only the Sigma-Aldrich additions, but also its legacy life science products. With just a few clicks, millions of visitors to the portal can search the comprehensive electronic catalog, select and purchase products. Visitors find exactly what they are looking for as well as recommended related products based on real-time behavioral analytics. As a leader in online scientific content, we are also able to provide the relevant white papers, protocols and peer review articles. With an order number or credit card, customers can use the secure platform to quickly and easily order products, look up prices, select rush delivery, plan the delivery date, check invoices, and much more. “Our e-commerce platform integrates all our capabilities to provide customers with easy access to all that we can offer them,” says Christos Ross, Head of Integrated Supply Chain Operations. Not only the e-commerce platform, but also the entire supply chain is highly efficient. The majority of the hundreds of thousands of products can be delivered within 24 hours around the world. “Our primary objective is to deliver quality products to our customers through our manufacturing operations and a combined network of 130 global distribution centers to get the right product to the right place at the right time,” emphasizes Ross. To fuel its growth strategy in the digital age, our company is thus counting on e-commerce as a distribution channel so that its billion dollar investment in the life science sector will soon pay off.

130

Life Science distribution centers

€5.4billion

in pro forma sales by our Life Science business sector including Sigma-Aldrich in 2015*

“Our e-commerce platform integrates all our capabilities to provide customers with easy access to all that we can offer them.”

Christos Ross, Head of Integrated Supply Chain Operations

* This net sales calculation would have resulted had the first-time consolidation of Sigma-Aldrich already taken place on January 1, 2015. Therefore, it is not identical to the net sales actually reported for 2015.